The idea of simply signing up for Social Security checks once you reach at 62 used to be a good idea. Not anymore. For each of us, there are 92 possible months to sign up. How do you know which one is best. And once you sign up, there is no turning back.
I’ve recently developed access to a company that provides a customized social security maximization report. It’s a sophisticated analysis that provides some great information about how to maximize the benefits for yourself and your spouse (assuming you have one.)
The report includes a timeline based on your life expectancy and the value now inside the Social Security system that defines your monthly income benefit. The key to knowing which month to start your benefits can have huge implications for your financial future.
The difference between starting at 62 or identifying the optimum date before you reach age 70 can mean hundreds of thousands of dollars over the rest of your life.
Please get in touch with me and I’ll provide you with the analysis. You’ll be ready to make a decision about when to start that is in your best interest.
In the meantime, here are 6 things I found in an article just recently:
Social Security is based on a simple idea: pay for retirement benefits through payroll taxes levied on workers and employers.
But that’s where the simplicity ends. Prospective retirees need to consider how to maximize their benefits and those of their spouses. Even the age when benefits are first collected has a great impact on how much is received each month.
Here are a few tips from the Social Security Agency website that spotlight some of the points an advisor needs to communicate to clients planning retirement.
1. Choose a date
How much a retiree receives each month varies greatly depending on what age Social Security benefits start. The longer one waits, up to age 70, the larger each check will be. The agency says that as a general rule, the total benefits a person receives will be the same no matter what age benefits begin.
2. Partners count
If a husband or wife applies for benefits, the partner might be eligible for spousal benefits even if he or she never worked a job under Social Security. The rules are complicated, but in some circumstances a couple can draw more money than if each drew their own benefits. It’s worth checking out.
3. Watch out for the taxman
George Harrison and The Beatles captured everyone’s disdain for the taxman. Those monthly benefits checks can be subject to taxes. For a couple, taxes are paid on half your Social Security benefits if reported income is between $32,000 and $44,000. Tax is paid on 85 percent of benefits above $44,000.
4. The return of the ex
This might not be the most welcome news, but a divorced spouse is entitled to benefits if a few conditions are met: he or she is unmarried, at least 62 and those benefits would be more than the person’s own Social Security payments.
5. There are limits
If you start collecting benefits before your full retirement age, you might see a reduction in your monthly check if you reach certain earning limits. For this year, the earnings limit is $15,120. A dollar for every $2 you make over the limit will be deducted from your benefits. The earnings limit rises to $15,480 next year.
6. The kids are alright
Children of those who qualify for benefits may be entitled to receive payments. To be eligible they must be: unmarried and under 18; or be 18 or 19 and be a fulltime student no higher than 12th grade; or be 18 or older and suffering from a disability that began before age 22. The payments do not reduce the primary Social Security beneficiary’s retirement benefit.
Originally published on BenefitsPro.com